NEW DELHI / HYDERABAD: The much-awaited report on RBI’s surplus reserves is yet again delayed. It is now expected by the end of this month, just days ahead of the Union Budget on July 5.
All the Bimal Jalan panel needs now is a consensus. But for the six-member committee, to agree is to split the deeply contentious Rs 9.6 lakh crore, which even prompted the then RBI Governor Urjit Patel to quit as a mark of protest last December.
The panel is unable to find a middle path due to opposing views. While the panel chief and former RBI boss Jalan and finance secretary Subhash Chandra Garg are on the same page favouring surplus transfer, others including former RBI deputy governor Rakesh Mohan, and RBI deputy governor N S Vishwanathan are against such a proposition. It’s unclear which way the other two RBI central board members — Bharat Doshi and Sudhir Mankad - are tilting towards.
The report was to be submitted within 90 days of the panel’s first meeting held on January 8, but it missed the deadline.“There’s still a wide gap between what the government seeks and what RBI is agreeing to part with. However, they’ve agreed to consider each other’s point of view and to meet and discuss once again,” sources told TNIE. When contacted, the panel members declined to comment on the issue.
According to finance ministry officials, the government sought a large share of the reserves to meet the fiscal deficit target. But RBI is not keen to transfer funds, surplus or not, saying it needs capital buffers to guard against financial shocks.
At the heart of the tussle is overall reserves, accounting for 26 per cent of RBI’s total assets. This, the finance ministry believes, is above the global norm of 14 per cent. In the past, experts warned RBI’s Rs 6.9 lakh crore revaluation reserves, which are dependent on currency and gold prices, cannot be toyed with as they are a mere accounting entry and not actual cash.
How deep is RBI’s pocket?
RBI’s assets: Rs 36L cr. Total reserves: Rs 9.6 lakh cr. Reserves include contingency fund (Rs 2.3 L cr), currency and gold revaluation fund (Rs 6.9 lakh crore)